Dubai’s IPO Surge: Capitalizing on Market Reforms and Investor Influx
Dubai IPO boom is expected with privatization, family business listings and tech start-ups.
4 min
Dubai’s growing IPO sector is fueled by a robust investment environment, supported by an increasing pool of High-Net-Worth Individuals (HNWIs) eager to capitalize on emerging opportunities.
This upswing is highlighted by the Dubai International Financial Centre (DIFC), a premier global financial hub in the MEASA region, which recently published a comprehensive report titled “Regional Outlook for Banking and Capital Markets” in collaboration with LSEG Data and Analytics.
The report outlines the expected growth of regional IPOs, which is anticipated to occur in three distinct phases: the continued privatization of state-related entities, listings by family-owned businesses, and the entry of FinTech and tech-enabled startups into the market.
Arif Amiri, CEO of the DIFC Authority, emphasizes that this increase in IPO activities is part of a broader expansion across the MENA region’s capital markets. This growth is largely attributed to reforms designed to improve market infrastructure and attract more foreign and regional investment.
“With its strategic initiatives and robust regulatory framework, DIFC plays a pivotal role in driving innovation and stimulating growth within the financial sector.
“Dubai’s IPO boom underscores the city’s status as a thriving hub for capital markets, and DIFC’s role in enabling this acceleration through the firms that drive capital markets and provide advisory services for IPOs will continue to contribute to the dynamic evolution of global finance.”
After a period of modest IPO activity, 2024 is poised for a revival, driven by postponed deals from 2023 that are now expected to benefit from improved market conditions. According to data from EY, 51 IPOs were launched in 2022, collectively raising $22 billion. The momentum is supported by both family-run businesses and public sector entities, contributing to greater economic diversity and liquidity in the private sector.
As of March 2024, Dubai had followed through on six out of the ten government entities it plans to take public, including Parkin, which was 165 times covered and attracted $71bn in orders – a new record for the emirate.
Another recent example includes the November 2023 listing of Dubai Taxi Co., a unit of Dubai’s Roads and Transport Authority (RTA), which raised $315m and was 130 times oversubscribed, while Saudi Arabia’s wider plans to privatize $55bn in assets by 2025 reinforce the increasing regional trend towards privatization.
From the private sector, the listing of family-owned companies is helping to drive business growth, succession planning and enhanced governance and transparency.
For example, Al Ansari Financial Services, one of the UAE’s largest remittance and foreign currency exchange companies, owned by a local family group raised $210m from its 2023 IPO, while Spinney’s (Spinneys 1961 Holding PLC), which was incorporated in DIFC to list its shares on DFM, thereby benefiting from its extensive laws, regulations, and stability, listed in April 2024.
Spurred on by the momentum of other, highly anticipated listings, such as Lulu’s forthcoming IPO, there is now an ever-growing list of demonstrable incentives for other family businesses to follow suit.
The wave of FinTech and technology-driven startups entering the IPO scene is also creating new industry sectors with high growth potential, thereby attracting a significant amount of investor interest, and providing substantial exit opportunities for venture capitalists.
Through increased IPO activity, banks, investment banks, brokerage firms and law firms within DIFC’s ecosystem also benefitted significantly from the privatization of state enterprises, with fees for MENA deals alone exceeding $1.2bn and proceeds from MENA equity and equity-related deals exceeding $13bn in 2023.
The DIFC, home to over 230 investment banks, is instrumental in driving these developments, with the region’s capital markets maturing under its stringent regulatory framework and commitment to fostering innovation.
Deepening of Dubai’s capital markets and market reforms, aligned with best practice have helped create greater opportunities for investors in different themes of the economy.
As outlined in the report by John Wilkinson, Head of Emerging Markets Equity Capital Markets and Managing Director, Goldman Sachs, DIFC is driving this growth as an attractive jurisdiction for incorporation, through its business-friendly approach towards the rule of law, and how the Centre has grown as a venue for global investors.
The region is home to a vast range of potential investors. Notably, these include family businesses, and wealthy individuals who are represented by the influx of wealth of asset management firms.
According to recent data, the UAE attracted a record-breaking number of High-Net-Worth Individuals (HNWIs) in 2022, which continued into 2023 and beyond.
Currently, there are an estimated 109,900 resident HNWIs, including 298 centi-millionaires and 20 billionaires, prompting DIFC’s estimated 370 asset managers to strengthen their presence in the emirate.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
With the growing global demand for digital infrastructure, Damac has been expanding its footprint in this important sector.
2 min
Damac Group, a renowned conglomerate with a diverse investment portfolio of luxury real estate, hospitality, property management, and logistics, has announced its plan to invest up to $1 billion in the data centers sector over the next few years.
Recognizing the increasing global demand for digital infrastructure, Damac has been expanding its footprint in this crucial sector. A significant milestone in Damac’s diversification strategy was the launch of Edgnex Data Centers in 2021, which has enabled the group to capitalize on the growing need for robust digital infrastructure.
According to Damac, Edgnex is making significant strides in Saudi Arabia, with facilities under construction in Dammam and Riyadh that will deliver 55MW by 2025. Additionally, plans are underway for a data centre in Amman, Jordan, and another in Turkey in partnership with Vodafone.
In May, Damac had announced its entry into the Indonesian market with plans to build a data center in Jakarta. The 15MW facility, located along MT Haryono, is scheduled to complete its first construction phase in the fourth quarter of 2025.
“This substantial investment in the data center sector reflects our commitment to advancing digital infrastructure and supporting the technological transitions that are essential for future growth and innovation,” said Hussain Sajwani, the Founder and Chairman of Damac Group.
In addition to the technological transitions and diversification, particularly in the data centers sector, Damac Group is heavily focusing on its Artificial Intelligence (AI) investments.
The increased focus on AI and technological infrastructure, he stated, is expected to bolster the Group’s existing portfolio and pave the way for new strategic partnerships and collaborations.
By investing in AI and data centers, it aims to leverage advanced technologies to create value and drive sustainable growth, he added.
The Damac Group’s diversified family office has already invested in over 70 funds across various strategies, demonstrating its commitment to fostering innovation and growth across multiple industries.
With this new focus on AI, the Group aims to further enhance its role in advancing foundational AI models and infrastructure.
“As a forward-thinking organization, we recognize the transformative potential of AI in shaping the future,” remarked Sajwani.
“Our increased investment in AI reflects our commitment to supporting the development of groundbreaking technologies that can drive significant progress and create new opportunities across various sectors,” he stated.
According to him, Damac has made notable investments in leading AI companies including a $50 million in the AI startup, Anthropic – as one of the top investors who have bought into the company from the bankrupt cryptocurrency exchange, FTX.
Also it has made investments in xAI – an American AI startup founded by Elon Musk and in Mistral – a France-based AI company which is one of the best European large-language model open source.
“We are excited to be part of the AI revolution and to contribute to the growth of this dynamic industry,” said Sajwani.
“Our investments in companies like Mistral, Anthropic, and xAI underscore our dedication to fostering innovation and driving the next wave of technological advancements,” he added.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
